The reverse is true with a bad credit rating. This page explains some simple steps to improve your credit score.

Important - How bad is your credit?

There are a number of different credit improvement strategies listed on this page. If you're interested in repairing or just improving yours the first thing I'd advise is to take a few minutes to estimate your credit rating.

Then, depending on how good or bad it is take some or all of the strategies listed below. For example, if it's bad try to take all the steps as well as undertaking some emergency credit repair strategies.

But if your rating is fine and you're just looking to improve and strengthen it then less work will obviously have to be done.

Remember: Nobody gets a good credit rating - you have to earn one.

This page also assumes you've read Credit File Basics and therefore have a sound knowledge of what a Credit File is, how it's scored and why it's so important.

Unfortunately many people have a tarnished credit rating, even those with well paid jobs, little or no debt, and money in the bank.

A bad credit rating will normally be the result of -

A series of bills being paid late

A Default or County Court Judgment (CCJ) being lodged against your name

Other details including not being eligible to vote (registered on the electoral roll)

Improving a credit file depends on how bad it is. For example, if it's bad because of some wrong information or you've been a chronic late payer of bills, that's fairly easy to sort out, just take the steps on this page.

Unfortunately it's hard, can take time and is not always possible to sort out problems caused by a Default or CCJ. If you have a Default then here are some articles to help -

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Step 1 summary - The first goal, which is the foundation of a good credit rating, is to make sure all your personal and financial information is correct.

Sadly however the CRAs hold a lot of incorrect data which must be first cleared up.

Step 2: Make sure you're on the Electoral Roll

A lender will use your credit file to try to assess your future ability to repay a credit agreement on time and within the agreement's terms. One dominant factor to determining whether you're a good risk or not is to look for stability.

This is obviously common sense. Most of us would rather do business with people we view as stable, rather than unstable. One excellent sign of stability is whether you're registered on the electoral roll as most good citizens are (even if they don't vote).

So if you're not registered to vote and want to improve your credit rating then you must get registered.

Step 2 summary - It's impossible to have a great credit rating unless you're registered to vote. Note, that if you do register the information will take between 1 and 2 months to show up on your credit file.

Step 3: Apply for more credit

A Credit rating will always improve when you do the following -

Borrow money - repay it on time : borrow money - repay it on time etc

And that's what this step is all about. You want to open at least 1 and maybe 2 or more credit card accounts, use them every month, then make the repayments every month and on time. The goal of this step is to -

Get some more credit accounts appearing on your credit file (that's a good thing), and

Flood your credit file with lots of positive repayment ticks so it starts to read -

This person borrows money every month, then repays it on time

So they're running their account(s) in a responsible fashion

The process takes time, between 6 - 18 months, and it can't be done any quicker as time is one of the factors to improving a credit file.

What if you can't qualify for a Credit Card

Chances are you can qualify.

Here are 2 of the best credit cards which are specifically aimed at those with damaged credit files, including if you've got CCJs and/or Defaults.

Vanquis Credit Card

Although it's normally very easy for people to qualify there are a few restrictions -

The credit limit on these cards will be small, usually no more than £500 (this is a good thing as spending cannot get out of control), plus the interest rates can be high, in excess of 30%. But a high rate should be of no concern as the aim is to repay the balance in full by the due date.

I would also advise applying for the 2 cards (Vanquis - Capital One card) even if you already have a credit card. Having 3 or more cards as I indicated above is an advantage when trying to rebuild your credit score as it means further credit agreements signed and more monthly borrowing and repaying.

Step 3 summary - The more credit accounts you have and the more monthly repayments you make will go a long way to diluting the negative information that's on your present credit file.

Time and patience - Sadly this process cannot be speeded up so give it 6-12+ months to work

Also, if you have a mortgage, a mobile phone contract (not PAYG) or any other credit agreement (perhaps a sofa on the HP), it's critical to make sure all those monthly payments get settled on time.

When it comes to improving your credit score, on time means the payment goes through at least 1 week, preferably 2, before the official due date. This means there's plenty of time to clear up any errors (perhaps the money wasn't credited to your account, or got lost etc).

Finally, don't forget that nobody is just given a good credit rating - you have to earn one. What this means is simple - if you're not willing to do the necessary work there's a good chance your personal credit file will never be as strong or as clean as it could be.....

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